FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended SEPTEMBER 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 0-24594
WEST COAST REALTY INVESTORS INC.
(Exact name of registrant as specified in its charter)
CALIFORNIA 95-4246740
(State or other Jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5933 W. CENTURY BLVD., 9TH, FLOOR
LOS ANGELES, CALIFORNIA 90045
(Address of principal executive offices)
(Zip Code)
(310) 670-0800
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No _______
APPLICABLE ONLY TO CORPORATE ISSUERS:
INDICATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE ISSUER'S CLASSES
OF COMMON STOCK, AS OF THE LATEST PRACTICABLE DATE. 2,932,762 SHARES
OUTSTANDING AS OF NOVEMBER 11, 1998.
<PAGE>
ITEM 1. FINANCIAL STATEMENTS
In the opinion of the Management of West Coast Realty Investors, Inc.
(the "Company"), all adjustments necessary for a fair presentation of the
Company's results for the three and nine months ended September 30, 1998 and
1997, have been made in the following financial statements which are normal
and recurring in nature. However, such financial statements are unaudited
and are subject to any year-end adjustments that may be necessary.
<TABLE>
WEST COAST REALTY INVESTORS, INC.
BALANCE SHEETS
SEPTEMBER 30, 1998 (UNAUDITED) AND DECEMBER 31, 1997
<CAPTION>
SEPTEMBER 30, 1998 December 31, 1997
<S> <C> <C>
ASSETS
Rental real estate, less accumulated
depreciation (Note 2) $33,538,636 $27,322,612
Cash and cash equivalents 6,619,637 2,099,857
Deferred rent 388,857 288,411
Loan origination fees, net of accumulated
amortization of $64,428 and $51,603 192,066 89,260
Other assets (Note 3) 202,943 38,951
TOTAL ASSETS $40,942,139 $29,839,091
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Accounts payable $ 24,531 $130,076
Due to related party (Note 5(e)) 266,635 187,267
Dividends payable (Note 8) 439,914 ---
Security deposits and prepaid rent 330,510 366,921
Other liabilities 122,337 107,032
Notes payable (Note 6) 15,370,342 11,194,832
TOTAL LIABILITIES 16,554,269 11,986,128
COMMITMENTS
STOCKHOLDERS' EQUITY
Common stock, $.01 par-shares authorized,
5,000,000 shares issued, 2,932,762 and
2,163,561 outstanding in 1998 and 1997 29,328 21,635
Additional paid-in capital 26,651,976 19,313,678
Deficit (2,293,434) (1,482,350)
TOTAL STOCKHOLDERS' EQUITY 24,387,870 17,852,963
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $40,942,139 $29,839,091
</TABLE>
[FN]
See accompanying notes to financial statements.
<PAGE>
<TABLE>
WEST COAST REALTY INVESTORS, INC.
STATEMENTS OF STOCKHOLDERS' EQUITY
NINE MONTHS ENDED SEPTEMBER 30, 1998
(UNAUDITED)
<CAPTION>
COMMON STOCK ADDITIONAL PAID-IN
SHARES AMOUNT CAPITAL DEFICIT
<S> <C> <C> <C> <C>
BALANCE AT DECEMBER 31, 1997 2,163,561 $21,635 $19,313,678 $(1,482,350)
Treasury stock 16,678 167 --- ---
Issuance of stock, net 752,523 7,526 7,156,623 ---
Equity contribution by Affiliates
through expense reimbursements --- --- 181,675 ---
Net income --- --- --- 521,038
Dividends declared (Note 8) --- --- --- (1,332,122)
BALANCE AT SEPTEMBER 30, 1998 2,932,762 $29,328 $26,651,976 $(2,293,434)
</TABLE>
<TABLE>
NINE MONTHS ENDED SEPTEMBER 30, 1997
(UNAUDITED)
<CAPTION>
COMMON STOCK ADDITIONAL PAID-IN
SHARES AMOUNT CAPITAL DEFICIT
<S> <C> <C> <C> <C>
BALANCE AT DECEMBER 31, 1996 1,550,607 $15,506 $13,861,763 $(972,378)
Issuance of stock, net 417,537 4,175 3,659,200 ---
Equity contribution by Affiliates
through expense reimbursements --- --- 88,742 ---
Net income --- --- --- 567,017
Dividends declared (Note 8) --- --- --- (1,071,820)
BALANCE AT SEPTEMBER 30, 1997 1,968,144 $19,681 $17,609,705 $(1,477,181)
</TABLE>
[FN]
See accompanying notes to financial statements.
<PAGE>
<TABLE>
WEST COAST REALTY INVESTORS, INC.
STATEMENTS OF INCOME
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
(UNAUDITED)
<CAPTION>
THREE MONTHS THREE MONTHS NINE MONTHS NINE MONTHS
ENDED ENDED ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER SEPTEMBER
1998 1997 30, 1998 30, 1997
<S> <C> <C> <C> <C>
REVENUES:
Rental $920,421 $735,057 $2,583,683 $2,182,869
Interest 67,371 37,605 129,445 70,558
987,792 772,662 2,713,128 2,253,427
COSTS AND EXPENSES:
Operating 45,968 43,076 113,728 110,772
Property taxes 28,201 27,722 79,827 83,167
Property management fees
- -related party (Note 5 (d)) 32,627 27,581 91,911 83,384
Interest 312,311 282,835 783,082 802,547
General and administrative 146,575 86,767 583,395 247,656
Depreciation and amortization 188,414 119,954 540,147 358,884
754,096 587,935 2,192,090 1,686,410
NET INCOME $233,696 $184,727 $521,038 $567,017
NET INCOME PER SHARE (NOTE 8) $.08 $.10 $.20 $.32
</TABLE>
[FN]
See accompanying notes to financial statements.
<PAGE>
<TABLE>
WEST COAST REALTY INVESTORS, INC.
STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997 (UNAUDITED)
<CAPTION>
NINE MONTHS NINE MONTHS
ENDED ENDED
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS SEPTEMBER SEPTEMBER
30, 1998 30, 1997
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $521,038 $567,017
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 527,322 349,260
Interest expense on amortization of loan origination fees 12,825 9,624
Increase (decrease) from changes in:
Accounts receivable (100,446) (156,255)
Other assets (163,992) 41,002
Accounts payable (105,545) (2,600)
Due to related party 79,368 34,272
Security deposits and prepaid rents (36,411) 12,658
Other liabilities 15,305 37,031
NET CASH PROVIDED BY OPERATING ACTIVITIES 749,464 892,009
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to rental real estate (6,743,346)(4,907,441)
NET CASH (USED IN) INVESTING ACTIVITIES (6,743,346)(4,907,441)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock, net 7,164,296 3,544,372
Equity contribution by Affiliates through expense
reimbursements 181,675 88,742
Dividends declared and paid (892,208) (931,344)
Proceeds from notes payable 4,375,000 2,312,500
Payments on notes payable (199,470) (163,154)
Increase in loan origination fees (115,631) 29,337
NET CASH PROVIDED BY FINANCING ACTIVITIES 10,513,662 4,880,453
NET INCREASE IN CASH AND CASH EQUIVALENTS 4,519,780 865,021
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 2,099,857 2,017,194
CASH AND CASH EQUIVALENTS, END OF PERIOD $6,619,637 $2,882,215
</TABLE>
[FN]
See accompanying notes to financial statements.
<PAGE>
WEST COAST REALTY INVESTORS, INC.
SUMMARY OF ACCOUNTING POLICIES
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997 (UNAUDITED)
AND DECEMBER 31, 1997
BASIS OF PRESENTATION
The accompanying balance sheet as of September 30, 1998, the income statements
and statements of cash flow for the nine months periods ended September 30,
1998, and 1997 are unaudited, but in the opinion of management include all
adjustments, consisting only of normal recurring accruals, necessary for a
fair presentation of the financial position and results of operations for the
periods presented. The results of operations for the nine month period ended
September 30, 1998, are not necessarily indicative of results to be expected
for the year ended December 31, 1998.
BUSINESS
West Coast Realty Investors, Inc. (the "Company"), is a corporation formed on
October 26, 1989 under the laws of the State of Delaware. The Company exists
as a Real Estate Investment Trust ("REIT") under Sections 856 to 860 of the
Internal Revenue Code. The Company has complied with all requirements imposed
on REIT's for 1997 and 1996 tax years; however, qualification as a REIT for
future years is dependent upon future operations of the Company. The Company
was organized to acquire interests in income-producing residential,
industrial, retail or commercial properties located primarily in California
and the west coast of the United States. The Company intends to acquire
property for cash on a moderately leveraged basis with aggregate mortgage
indebtedness not to exceed fifty percent of the purchase price of all
properties on a combined basis, or eighty percent individually and intends to
own and operate such properties for investment over an anticipated holding
period of five to ten years.
RENTAL PROPERTIES AND DEPRECIATION
Assets are stated at lower of cost or net realizable value. Depreciation is
computed using the straight-line method over their estimated useful lives of
31.5 to 39 years for financial and income tax reporting purposes.
In the event that facts and circumstances indicate that the cost of an asset
may be impaired, an evaluation of recoverability would be performed. If an
evaluation is required, the estimated future undiscounted cash flows
associated with the asset would be compared to the carrying amount to
determine if a write-down to market value is required.
LOAN ORIGINATION FEES
Loan origination fees are capitalized and amortized over the life of the loan.
<PAGE>
WEST COAST REALTY INVESTORS, INC.
SUMMARY OF ACCOUNTING POLICIES
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997 (UNAUDITED)
AND DECEMBER 31, 1997 (CONTINUED)
LEASE COMMISSIONS
Lease commissions which are paid to real estate brokers for locating tenants
are capitalized and amortized over the life of the lease.
RENTAL INCOME
Rental income is recognized on a straight-line basis to the extent that rental
income is deemed collectable. Where there is uncertainty of collecting higher
scheduled rental amounts, due to the tendency of tenants to renegotiate their
leases for lower amounts, rental income is recognized as the amounts are
collected.
CASH AND CASH EQUIVALENTS
The Company considers cash in the bank, liquid money market funds, and all
highly liquid certificates of deposits, with original maturities of three
months or less, to be cash and cash equivalents.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
RECLASSIFICATIONS
For comparative purposes, certain prior year amounts have been reclassified
to conform to the current year presentation.
NEW ACCOUNTING PRONOUCEMENTS
Statement of Financial Accounting Standards No. 130 (SFAS No. 130) "Reporting
Comprehensive Income," issued by the Financial Accounting Standards Board is
effective for financial statements with fiscal years beginning after December
15, 1997. Earlier application is permitted. SFAS No. 130 establishes
standards for reporting and display of comprehensive income and its
components in a full set of general-purpose financial statements. The
Company has not determined the effect on its financial position or results of
operations, if any, from the adoption of this statement.
<PAGE>
WEST COAST REALTY INVESTORS, INC.
SUMMARY OF ACCOUNTING POLICIES
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997 (UNAUDITED)
AND DECEMBER 31, 1997 (CONTINUED)
NEW ACCOUNTING PRONOUCEMENTS (CONT.)
Statement of Financial Accounting Standards No. 131 (SFAS No. 131),
"Disclosure about Segments of an Enterprise and Related Information," issued
by the Financial Accounting Standards Board is effective for financial
statements with fiscal years beginning after December 15, 1997. The new
standard requires that public business enterprises report certain information
about operating segments in complete sets of financial statements of the
enterprises and in condensed financial statements of interim periods issued
to shareholders. It also requires that public business enterprises report
certain information about their products and services, the geographic areas
in which they operate and their major customers. The Company has not
determined the effect on its financial position or results of operations, if
any, from the adoption of this statement.
EARNINGS (LOSS) PER SHARE
On March 3, 1997, the FASB issued Statement of Financial Accounting Standards
No. 128, "Earnings Per Share" (SFAS 128). This pronouncement provides a
different method of calculating earnings per share than is currently used in
accordance with APB 15, "Earnings Per Share". SFAS 128 provides for the
calculation of Basic and Diluted earnings per share. Basic earnings per share
includes no dilution and is computed by dividing income available to common
shareholders by the weighted average number of common shares outstanding for
the period. Diluted earnings per share reflects the potential dilution of
securities that could share in the earnings of the entity, similar to fully
diluted earnings per share. Except where the provisions of the Securities and
Exchange Commission's Staff Accounting Bulletin No. 98 are applicable, common
share equivalents have been excluded in all years presented in the Statements
of Operations when the effect of their inclusion would be anti-dillutive.
SFAS 128 is effective for fiscal years and interim periods after December 15,
1997. The Company has adopted this pronouncement during the fiscal year ended
December 31, 1997. The adoption of SFAS 128 did not effect earnings per share
for the fiscal year ended December 31, 1997 and prior years.
<PAGE>
WEST COAST REALTY INVESTORS, INC.
NOTES TO FINANCIAL STATEMENTS
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997 (UNAUDITED)
AND DECEMBER 31, 1997
NOTE 1 - GENERAL
On October 30, 1989, West Coast Realty Advisors, Inc. (the "Advisor"),
purchased 1,000 shares of the Company's common stock for $10,000. On August
30, 1990, the Company reached its minimum initial offering funding level of
$1,000,000. As of September 30, 1998 the Company has raised $29,270,486 in
capital.
Sales commissions and wholesaling fees, representing 8% of the gross proceeds
from the sale of common shares, were paid to Associated Securities Corp.
("ASC"), a member of the National Association of Securities Dealers, Inc.
("NASD") and an affiliate of the Advisor.
Dividends are declared and accrued based approximately upon the previous
quarter's income from operations before depreciation and amortization.
NOTE 2 - RENTAL PROPERTIES
The Company owns the following income-producing properties
ORIGINAL
LOCATION (PROPERTY NAME) DATE PURCHASED ACQUISITION COST
Huntington Beach, California
(Blockbuster) February 26, 1991 $ 1,676,210
Fresno, California May 14, 1993 1,414,893
Huntington Beach, California September 15, 1993 2,500,001
Riverside, California November 29, 1994 3,655,500
Tustin, California (Safeguard) May 22, 1995 4,862,094
Fremont, California
(Technology Drive) October 31, 1995 3,747,611
Sacramento, California August 2, 1996 1,828,500
(Java City)
Irvine, California (Tycom) January 17, 1997 4,907,441
Roseville, California October 31, 1997 1,976,484
Corona, California December 31, 1997 1,904,452
Sacramento, California January 15, 1998 2,141,200
(Laufen Tile International)
Chino, California April 9, 1998 1,859,338
Vacaville, California May 20, 1998 2,735,307
<PAGE>
WEST COAST REALTY INVESTORS, INC.
NOTES TO FINANCIAL STATEMENTS
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997 (UNAUDITED)
AND DECEMBER 31, 1997 (Continued)
NOTE 2 - RENTAL PROPERTIES (CONTINUED)
The major categories of property are:
SEPTEMBER 30, 1998 DECEMBER 31, 1997
Land $ 11,564,090 $ 9,449,150
Buildings and improvements 23,644,941 19,016,532
35,209,031 28,465,682
Less accumulated depreciation 1,670,395 1,143,070
Net rental properties $ 33,538,636 $ 27,322,612
A significant portion of the Company's rental revenue was earned from tenants
whose individual rents represented more than 10% of total rental revenue.
Specifically:
Four tenants accounted for 19%, 16%, 13% and 13% of total rental revenue in
1998;
Four tenants accounted for 20%, 16%, 16% and 15% of total rental revenue in
1997;
Five tenants accounted for 23%, 19%, 18%, 12% and 10% of total rental revenue
in 1996;
NOTE 3 - OTHER ASSETS
Other assets consists of the following:
SEPTEMBER 30, 1998 DECEMBER 31, 1997
Deposits and prepaid expenses $202,943 $38,951
Organization costs 14,330 14,330
217,273 53,281
Less accumulated amortization 14,330 14,330
Net other assets $202,943 $38,951
<PAGE>
WEST COAST REALTY INVESTORS, INC.
NOTES TO FINANCIAL STATEMENTS
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997 (UNAUDITED)
AND DECEMBER 31, 1997 (Continued)
NOTE 4 - FUTURE MINIMUM RENTAL INCOME
As of September 30, 1998 and December 31, 1997, future minimum rental income
under the existing leases that have remaining noncancelable terms in excess
of one year are as follows:
SEPTEMBER 30, 1998 DECEMBER 31,1997
1998 ........................... $1,037,596 $2,822,600
1999 ........................... 3,379,171 2,864,178
2000 ........................... 3,391,476 2,906,830
2001 ........................... 3,288,737 2,834,342
2002 ........................... 3,159,822 2,704,149
Thereafter ..................... 13,213,555 11,772,647
Total $27,470,357 $25,904,746
Future minimum rental income does not include lease renewals or new leases
that may result after a noncancelable-lease expires.
NOTE 5 - RELATED PARTY TRANSACTIONS
The Advisor has an agreement with the Company to provide advice on investments
and to administer the day-to-day operations of the Company. Property
management services for the Company's properties are provided by West Coast
Realty Management, Inc. ("WCRM"), an affiliate of the Advisor.
<PAGE>
WEST COAST REALTY INVESTORS, INC.
NOTES TO FINANCIAL STATEMENTS
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1998, AND 1997 (UNAUDITED)
AND DECEMBER 31, 1997 (Continued)
During the periods presented, the Company had the following related party
transactions:
(a) In accordance with the advisory agreement, compensation earned by, or
services reimbursed or reimbursable to the advisor, consisted of the
following:
NINE MONTHS ENDED FOR THE YEAR ENDED
SEPTEMBER 30, 1998 DECEMBER 31, 1997
Syndication fees $658,001 $262,833
Acquisition fees and financing fees 501,157 384,719
Overhead expenses 18,000 24,000
$1,177,158 $671,552
(b) At September 30, 1998 and December 31, 1997, the Advisor owned 22,556
shares of the issued and outstanding shares of the Company.
(c) Sales commissions paid in accordance with the selling agreement to
ASC totaled $422,510 for the nine months ended September 30, 1998
and $310,421 for the nine months ended September 30, 1997.
(d) Property management fees earned by WCRM totaled $32,627 and $27,581
for the three months ended September 30, 1998 and 1997,
respectively. For the nine months ended September 30, 1998 and
1997, WCRM earned $91,911 and $83,384, respectively in property
management fees.
(e) The Corporation had related party accounts payable as follows:
SEPTEMBER 30, 1998 DECEMBER 31, 1997
Associated Securities Corp. $ 11,019 $ 6,152
West Coast Realty Management 32,627 23,192
West Coast Realty Advisors 222,989 157,923
$266,635 $187,267
<PAGE>
WEST COAST REALTY INVESTORS, INC.
NOTES TO FINANCIAL STATEMENTS
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1998, AND 1997 (UNAUDITED)
AND DECEMBER 31, 1997 (Continued)
NOTE 6 - NOTES PAYABLE
Notes payable is made up of the following:
SEPTEMBER 30, DECEMBER 31,
1998 1997
8.25% promissory note secured by a Deed of
Trust on the Fresno Property, monthly
principal and interest payments are $5,244 due
August 1, 2003 _____ $606,789 $616,219
Variable rate promissory note secured by a
Deed of Trust on the Huntington Beach
property, interest rate adjustments are
monthly and are based on the 11th District
cost of funds rate plus 3% (7.911% at
September 30, 1998), and may never go below
6.5% or above 11.0%, monthly principal and
interest payments are $12,723 due October 1,
2003 ______ 1,673,820 1,688,870
8.25% promissory note secured by a Deed of
Trust on the Blockbuster property, interest
rate adjusts to the 5-year Treasury rate plus
350 basis points on February 1, 1999, monthly
principal and interest payments are $4,934,
due February 1, 2004 _________ 546,146 556,403
9.25% promissory note secured by a Deed of
Trust on the Riverside property, monthly
principal and interest payments are $9,988 due
November 8, 2004 ____ 1,159,154 1,167,149
9.625% promissory note secured by a Deed of
Trust on the Safeguard property, monthly
principal and interest payments are $24,191,
due February 1, 2005 ____ 1,998,407 2,069,004
8.24% promissory note secured by a Deed of
Trust on the Fremont property, interest rate
equaled the 20-year Treasury rate plus 1.65%
at loan closing, monthly principal and
interest payments are currently $18,898 due
August 1, 2015 _____________ 2,050,358 2,090,456
10% promissory note secured by a Deed of Trust
on the Java City property, monthly principal
and interest payments are $3,413, due November
1, 2001____ 323,210 329,083
<PAGE>
WEST COAST REALTY INVESTORS, INC.
NOTES TO FINANCIAL STATEMENTS
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1998, AND 1997 (UNAUDITED)
AND DECEMBER 31, 1997 (Continued)
NOTE 6 - NOTES PAYABLE (CONT.)
Notes payable is made up of the following: (cont.)
SEPTEMBER 30, DECEMBER 31,
1998 1997
8% promissory note secured by a Deed of Trust
on the Java City property, monthly principal
and interest payments are $3,126 due June 1,
2018 ______ $369,460 $375,540
Variable rate promissory note secured by a
Deed of Trust on the Tycom property, interest
rate margin is 1.9% over the 3 month LIBOR
with right of conversion after the first year
(7.23% at September 30, 1998), monthly
principal and interest payments are $17,469
due June 30, 2007_____________ 2,276,465 2,302,108
7.375% promissory note secured by a Deed of
Trust on the Sacramento (Laufen Tile)
property, monthly principal and interest
payments are $7,309, due June 1, 2011 _____ 996,489 ---
7.375% promissory note secured by a Deed of
Trust on the Corona property, monthly
principal and interest payments are $7,309,
due June 1, 2011 ______ 996,489 ---
8.33% promissory note secured by a Deed of
Trust on the Roseville property, monthly
principal and interest payments are $11,510,
due July 1, 2008 _____ 1,448,555 ---
Variable rate promissory note secured by a
Deed of Trust on the Chino property, interest
rate may be adjusted as of the 4th and 8th
anniversary dates to the weekly average of the
5-year Treasury Note for the seventh week
prior to the anniversary date. Interest rate
is 7.50% as of September 30, 1998 and current
monthly principal and interest payments are
$6,836, due October 1, 2010 ______________ 925,000 ---
Total Notes Payable $15,370,342 $11,194,832
<PAGE>
WEST COAST REALTY INVESTORS, INC.
NOTES TO FINANCIAL STATEMENTS
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1998, AND 1997 (UNAUDITED)
AND DECEMBER 31, 1997 (Continued)
NOTE 6 - NOTES PAYABLE (CONT.)
The fair value of the notes are approximately $15,400,000 and $11,128,000 at
September 30, 1998 and December 31, 1997 respectively, calculated by
discounting the expected future cash outflows on the notes to the present
based on current lending rates which are the approximate industry lending
rates on these type of properties and these locations.
The aggregate annual future maturities at September 30, 1998 and December 31,
1997 are as follows:
YEAR ENDING SEPTEMBER 30, 1998 DECEMBER 31, 1997
1998 _________ $ 82,321 $ 257,341
1999 _________ 339,375 277,629
2000 _________ 367,509 300,845
2001 _________ 400,120 328,143
2002 _________ 727,064 649,352
Thereafter _______ 13,453,953 9,381,522
Total $15,370,342 $11,194,832
NOTE 7 - DIVIDEND REINVESTMENT PLAN
The Company had a Dividend Reinvestment Plan (the "Plan") whereby cash
dividends would, upon election of the shareholders, be used to purchase
additional shares of the Company. The shareholders' participation in the
Plan was terminable at any time. The Company eliminated the Dividend
Reinvestment Plan effective April 22, 1998.
NOTE 8 - NET INCOME AND DIVIDENDS PER SHARE
Net Income Per Share for the nine months ended September 30, 1998 and 1997
was computed using the weighted average number of outstanding shares of
2,561,114 and 1,764,404, respectively.
<PAGE>
WEST COAST REALTY INVESTORS, INC.
NOTES TO FINANCIAL STATEMENTS
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1998, AND 1997 (UNAUDITED)
AND DECEMBER 31, 1997 (Continued)
NOTE 8 - NET INCOME AND DIVIDENDS PER SHARE (CONT.)
Dividends declared during the first nine months 1998 and 1997 were as follows:
OUTSTANDING AMOUNT TOTAL
RECORD DATE SHARES PER SHARE DIVIDEND
January 1, 1998 2,149,404 $ 0.0666 $143,150
February 1, 1998 2,345,825 0.0666 156,232
March 1, 1998 2,345,825 0.0666 156,232
April 1, 1998 2,345,825 0.0558 130,897
May 1, 1998 2,590,131 0.0558 144,529
June 1, 1998 2,888,319 0.0558 161,168
September 30, 1998 2,932,762 0.1500 439,914
TOTAL $1,332,122
OUTSTANDING AMOUNT TOTAL
RECORD DATE SHARES PER UNIT DIVIDEND
January 1, 1997 1,550,607 $ 0.0666 $103,270
February 1, 1997 1,671,442 0.0666 111,318
March 1, 1997 1,671,442 0.0666 111,318
April 1, 1997 1,810,916 0.0666 120,607
May 1, 1997 1,815,579 0.0666 120,917
June 1, 1997 1,815,579 0.0666 120,917
July 1, 1997 1,815,579 0.0666 120,917
August 1, 1997 1,974,144 0.0666 131,478
September 1, 1997 1,968,144 0.0666 131,078
TOTAL $1,071,820
NOTE 9 - SUBSEQUENT EVENTS
(a) In October 1998, the Company paid dividends totaling $439,914 ($0.150 per
share per period), payable to shareholders of record on September 30, 1998
(Note 8).
(b) On October 2, 1998, the Company received proceeds of $1,410,093 in
connection with financing secured by the Vacaville, California property.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Certain statements in the Management Discussion and Analysis constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995 (the "Reform Act"). Such forward-looking
statements involve known and unknown risks, uncertainties, and other factors
which may cause the actual results, performance or achievements of the
Company to be materially different from any future results, performance or
achievements, expressed or implied by such forward-looking statements.
INTRODUCTION
West Coast Realty Investors, Inc. is a Delaware corporation, formed on October
26, 1989. The Company began offering for sale shares of Common Stock on April
20, 1990. On August 30, 1990, the Company reached its minimum initial
offering funding level of $1,000,000. A secondary offering of shares was
begun on May 14, 1992. On November 30, 1992 the Company reached its minimum
secondary offering funding level of $250,000. A third offering of shares was
begun on June 3, 1994. On July 25, 1994, the Company reached its minimum
third offering funding level of $250,000. A fourth offering of shares began
on May 6, 1996. As of September 30, 1998, the Company had raised $29,270,486
in gross proceeds from all four offerings.
The Company was organized for the purpose of investing in, improving, holding,
and managing equity interests in a diversified portfolio of commercial
properties located in California and the West Coast, while qualifying as a
Real Estate Investment Trust. Properties will be acquired for cash or on a
moderately leveraged basis, with aggregate indebtedness not to exceed 50% of
the purchase price of all properties on a combined basis. The Company
intends to hold each property for approximately seven to ten years.
The Company's principal investment objectives are to invest in rental real
estate properties which will:
(1) Preserve and protect the Company's invested capital;
(2) Provide shareholders with cash distributions; a portion of which will
not constitute taxable income.
(3) Provide capital gains through potential appreciation; and
(4) Provide market liquidity through transferable shares of stock.
The Company qualifies as a Real Estate Investment Trust (REIT) for federal
and state income tax purposes.
The ownership and operation of any income-producing real estate is subject to
those risks inherent in all real estate investments, including national and
local economic conditions, the supply and demand for similar types of
properties, competitive marketing conditions, zoning changes, possible
casualty losses, increases in real estate taxes, assessments, and operating
expenses, as well as others.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
INTRODUCTION (CONT.)
The Company has engaged West Coast Realty Advisors, Inc. ("WCRA") to act as
the Company's advisor. Pursuant to the terms of the advisory agreement, WCRA
provides investment and financial advice and conducts the day-to-day
operations of the Company. The Company, itself, has no employees.
LIQUIDITY AND CAPITAL RESOURCES
During the nine months ended September 30, 1998 the Company declared dividends
totaling $1,332,122, compared to the nine months ended September 30, 1997,
when the Company declared dividends totaling $1,071,820. Dividends are
determined by management based on cash flows and the liquidity position of
the Company. It is the intention of management to declare dividends, subject
to the maintenance of reasonable reserves.
During the nine months ended September 30, 1998 the Company raised an
additional $7,164,296 in net proceeds as the result of the sale of shares
from its fourth public offering. The Company used the net proceeds from
offerings to purchase additional income-producing properties and to add to
the cash reserve balances of the Company as is prudent given the amount of
property now under ownership.
Management uses cash as its primary measure of the Company's liquidity. The
amount of cash that represents adequate liquidity for a real estate
investment company, is dependent on several factors. Among them are:
1. Relative risk of the Company's operations;
2. Condition of the Company's properties;
3. Stage in the Company's operating cycle (e.g., money-raising,
acquisition, operating or disposition phase); and
4. Shareholders dividends.
The Company is adequately liquid and management believes it has the ability
to generate sufficient cash to meet both short-term and long-term liquidity
needs, based upon the above four points.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
LIQUIDITY AND CAPITAL RESOURCES (CONT.)
The first point refers to the risk of the Company's investments. At September
30, 1998, the Company's excess funds were invested in short-term money market
funds. The purchase of rental properties had been made either entirely with
cash or the use of moderate leverage. During the nine months ended September
30, 1998, notes payable pertaining to property acquisitions by the Company
increased $4,375,000 due to the refinancing of purchased income-producing
properties, while cash used in principal repayments of notes totaled $181,675.
Although most of the notes are set up on an amortization schedule allowing for
the repayment of principal over time, most of the principal on the notes is
due in balloon payments that come due in the years 2002 through 2011. The
Company is aware that prior to the time that these large payments come due,
refinancing of the loans or the sale of the property(ies) will be necessary
in order to protect the interests of the Company's shareholders. Furthermore,
most of the properties' tenants are nationally known retailers or
well-established business under long-term leases, which makes the properties
easier to sell or refinance.
As to the second point, the Company's properties are in good condition without
significant deferred maintenance obligations and are leased through
"triple-net" leases, which reduces the Company's risk pertaining to excessive
maintenance and operating costs.
As to the third point, the Company was liquid at September 30, 1998.
Virtually all funds raised during the nine months ended September 30, 1998
were invested in short-term money market funds. As of September 30, 1998,
the Company has allocated approximately $880,000 towards a "reserve" fund (3%
of gross funds raised, as disclosed in the Company's latest prospectus),
$439,914 of cash held pending distribution to investors, $150,000 of cash to
be used for current mortgage and accounts payable commitments, $330,000 in
tenant security deposits and prepaid rents, and the balance--$4,820,000--
expected to be invested in future property acquisitions. The Company's
operations generated $1,061,185 in net operating cash flow in the nine months
ending September 30, 1998 (net income plus depreciation and amortization
expense). Thus, the Company is generating significant amounts of cash flow
currently and could choose to withhold payment of all or a portion of
dividends, if necessary, in order to rebuild cash balances.
Fourth, the amount of dividends to shareholders was made at a level consistent
with the amount of net income available after application of expenses. The
Company is careful not to make distributions in excess of the income
available.
Inflation and changing prices have not had a material effect on the Company's
operations.
The Company currently has no external sources of liquidity, other than funds
that potentially could be received from the sale of additional shares.
The Company currently has no material capital commitments.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
LIQUIDITY AND CAPITAL RESOURCES (CONT.)
The Tax Reform Acts of 1986 and 1987 and the Revenue Reconciliation Acts of
1990 and 1993 did not have a material impact on the Company's operations.
RESULTS OF OPERATIONS - 9 MONTHS ENDED SEPTEMBER 30, 1998 VS. 9 MONTHS ENDED
SEPTEMBER 30, 1997
Operations for the nine months ended September 30, 1998 represented a full
nine months of rental operations for all properties except Sacramento
property which was acquired on January 15, 1998, the Chino property which was
acquired on April 9, 1998 and the Vacaville property which was acquired on
May 20, 1998.
Rental revenue increased $400,814 (18.4%) due to a full nine months ownership
of the Irvine property and partial ownership of the Sacramento, Chino and
Vacaville properties (as compared to no ownership of these properties during
the nine months ended September 30, 1997). Interest income increased $58,887
(83.5%) due to higher cash balances maintained in money market accounts
during the nine months ended September 30, 1998 compared to the nine months
ended September 30, 1997.
Operating expenses increased $2,956 (2.7%). This increase resulted primarily
due to increases in legal and property insurance expenses, offset by decreases
in utilities and miscellaneous office expenses. Interest expense decreased
$19,465 (2.4%) as a reflection of the Company acquiring the Sacramento, Chino
and Vacaville properties for cash during 1998. However, on June 1, 1998 the
Corona and Sacramento properties were refinanced and additional debt was taken
on in connection with these property acquisitions. Additionally, on July 10,
1998 and on September 17, 1998, the Roseville and Chino properties,
respectively, were refinanced and additional debt was taken on in connection
with these property acquisitions. Despite the large debt amounts, the Company
is still below the maximum 50% aggregate debt to equity ratio that is allowed
by the Company's by-laws (debt was 44% of property cost (as defined in the
by-laws) at September 30, 1998). General and administrative costs increased
$335,739 (136%) due primarily to acquisition and refinancing fees of
$298,605 expended in connection with additional property acquisitions, which
were previously capitalized as part of the cost of the property. The Company
was required to begin expensing acquisition fees in accordance with the
Emerging Issues Task Force 97-11 "Accounting for Internal Costs Relating to
Real Estate Property Acquisitions". Depreciation and amortization expense
increased $181,263 (50.5%) as the result of the ownership of additional
properties during 1998 as compared to 1997. Net income of $521,038 for the
nine months ended September 30, 1998 was $45,979 (8.1%) lower than the nine
months ended September 30, 1997. This decrease in net income is primarily
attributable to the $298,605 of acquisition and refinancing fees expensed
in connection with the additional property acquisitions.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
RESULTS OF OPERATIONS - 9 MONTHS ENDED SEPTEMBER 30, 1998 VS. 9 MONTHS ENDED
SEPTEMBER 30, 1997 (CONT.)
The average number of shares outstanding during 1998 was 2,561,114 vs.
1,764,404 in 1997. Partly because of the greater number of shares
outstanding, the net income per share decreased from $.32 in 1997 to $.20 in
1998. If this figure is analyzed using flow of funds - that is net income
plus depreciation expense, plus adding acquisition and refinancing fees which
were incurred in 1998 and not 1997 - then the amount in 1998 was $.53 per
share vs. $.60 per share in 1997.
During the nine months ended September 30, 1998, the Company declared
dividends totaling $1,332,122 compared to dividends of $1,071,820 declared
for the nine months ended September 30, 1997. Cash basis income for the nine
months ended September 30, 1998 was $1,061,185. This was derived by adding
depreciation and amortization expense to net income. Thus, dividends
declared during the nine months ended September 30, 1998 were $270,937
greater than cash basis net income. In comparison, dividends declared in the
first nine months of 1997 were $145,919 greater than cash basis income of
$925,901. In either event, the Company continued to qualify as a REIT in
1998, and liquidity of the Company continues to be strong.
RESULTS OF OPERATIONS - 3 MONTHS ENDED SEPTEMBER 30, 1998 VS. 3 MONTHS ENDED
SEPTEMBER 30, 1997
Operations for the three months ended September 30, 1998 represented a full
quarter of rental operations for all properties.
Rental revenue increased $185,364 (25.2%) due to a full quarter ownership of
the Roseville, Corona, Sacramento, Chino and Vacaville (as compared to no
ownership of these properties during the quarter ended September 30, 1997).
Interest income increased $29,766 (79.2%) due to higher cash balances
maintained in money market accounts during the quarter ended September 30,
1998 compared to the quarter ended September 30, 1997.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
RESULTS OF OPERATIONS - 3 MONTHS ENDED SEPTEMBER 30, 1998 VS. 3 MONTHS ENDED
SEPTEMBER 30, 1997 (CONT.)
Operating expenses increased $2,892 (6.7%). This increase was primarily the
result of additional legal and property insurance expenses, offset by
decreases in utilities and miscellaneous office expenses during the quarter
ended September 30, 1998, compared to the quarter ended September 30, 1997.
Interest expense increased $29,476 (10.4%) as a reflection of the Company
refinancing the Roseville and Chino properties during the quarter ending
September 30, 1998, compared to no additional financing of properties during
the quarter ending September 30, 1997. Despite the large debt amounts, the
Company is still below the maximum 50% aggregate debt to equity ratio that is
allowed by the Company's by-laws (debt was 44% of property cost (as defined
in the by-laws) at September 30, 1998). General and administrative costs
increased $59,808 (69%) from the quarter ended September 30, 1997 to
September 30, 1998, due primarily to $43,750 of refinancing fees expended in
connection with additional debt on property acquisitions, which were
previously capitalized as part of the cost of the property. The Company was
required to begin expensing acquisition and refinancing fees in accordance
with the Emerging Issues Task Force 97-11 "Accounting for Internal Costs
Relating to Real Estate Property Acquisitions". Depreciation and
amortization expense increased $68,460 (57.1%) from the quarter ending
September 30, 1997 to September 30, 1998 as the result of the ownership of
additional properties.
Net income of $233,696 for the quarter ended September 30, 1998 was $48,969
(26.7%) higher than the quarter ended September 30, 1997. This increase in
net income is attributable to increased revenue in connection with the
acquisition of additional properties and a significant increase in interest
income, offset by increased overall expenses relating to the operation of
the Company.
The average number of shares outstanding during the quarter ending
September 30, 1998 was 2,921,651 vs. 1,893,361 for the quarter ending
September 30, 1997. Partly because of the greater number of shares
outstanding, the net income per share decreased from $.10 for the quarter
ended September 30, 1997 to $.08 for the quarter ended September 30, 1998.
If this figure is analyzed using flow of funds - that is net income plus
depreciation expense, plus adding acquisition and refinancing fees which was
incurred in 1998 and not 1997 - then the amount for the quarter ended
September 30, 1998 would be $.16 per share vs. $.16 per share for the
quarter ended September 30, 1997.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
RESULTS OF OPERATIONS - 3 MONTHS ENDED SEPTEMBER 30, 1998 VS. 3 MONTHS ENDED
SEPTEMBER 30, 1997 (CONT.)
During the quarter ended September 30, 1998, the Company declared dividends
totaling $439,914, compared to dividends of $383,473 declared for the quarter
ended September 30, 1997. Cash basis income for the quarter ended
September 30, 1998 was $422,110. This was derived by adding depreciation
and amortization expense to net income. Thus, dividends declared during the
quarter ended September 30, 1998 were $17,804 greater than cash basis net
income. In comparison, dividends declared for the quarter ended
September 30, 1997 were $78,792 greater than cash basis income of $304,681.
In either event, the Company continued to qualify as a REIT in 1998, and
liquidity of the Company continues to be strong.
CASH FLOWS - FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 VS. THE NINE MONTHS
ENDED SEPTEMBER 30, 1997
Cash resources increased $4,519,780 during the nine months ended September 30,
1998 compared to a $865,021 increase in cash resources for the nine months
ended September 30, 1997. Cash provided by operating activities increased by
$749,464 with the largest contributor being $1,061,185 in cash basis net
income for the nine months ended September 30, 1998. Cash basis net income
was offset by a $163,992 increase in other assets, due to increases in
deposits for property acquisitions and leasing commissions. In contrast,
the nine months ended September 30, 1997 provided $892,009 in cash from
operating activities due primarily to $925,901 in cash basis net income. The
sole use of cash in investing activities for the nine months ended
September 30, 1998 was $6,743,346 expended for the acquisition of three
additional properties located in Sacramento (Laufen Tile International),
Corona and Vacaville, California. In contrast, cash used in investing
activities totaled $4,907,441 for the nine months ended September 30, 1997,
resulting from the acquisition of the Irvine, California property in
January 1997. For the nine months ended September 30, 1998, financing
activities provided an additional $10,513,662 via the sale of additional
shares in the Company ($7,164,296 in net proceeds), and $4,375,000 in
financing obtained in connection with the acquisition of additional
properties, less dividends paid of $892,208 and repayments on notes payable
of $199,470. In contrast, the nine months ended September 30, 1997,
financing activities provided an additional $4,880,453 via the sale of
additional shares in the Company ($3,544,372 in net proceeds), and
$2,312,500 in financing obtained in connection with the acquisition of
additional properties, less dividends paid and payable of $931,344 and
repayments of notes payable of $163,154.
In summary then, the operating performance of the Company continued to
improve as additional properties are acquired, and all properties were
operated profitably.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
PENDING PROPERTY REFINANCING TRANSACTIONS
VACAVILLE PROPERTY
The Company negotiated the financing of the Vacaville property on October 2,
1998. This property was purchased for cash on May 20, 1998. The terms of
the Note and the first deed of trust are as follows:
Lender: Standard Mortgage Investors, LLC
Loan Amount: $1,400,000
Interest Rate: 7.5% annum and may be adjusted as of the 4th and 8th
anniversary dates to the weekly average of the five-year Treasury
Note plus 200 basis points, but in no event less than 7.50%.
Loan Term: Twelve year term
Current Monthly Debt Service: $10,346
NEW ACCOUNTING PRONOUNCEMENTS
Statement of Financial Accounting Standards No. 130 (SFAS No. 130) "Reporting
Comprehensive Income," issued by the Financial Accounting Standards Board is
effective for financial statements with fiscal years beginning after December
15, 1997. Earlier application is permitted. SFAS No. 130 establishes
standards for reporting and display of comprehensive income and its
components in a full set of general-purpose financial statements. The
Company has not determined the effect on its financial position or results of
operations, if any, from the adoption of this statement.
Statement of Financial Accounting Standards No. 131 (SFAS No. 131),
"Disclosure about Segments of an Enterprise and Related Information," issued
by the Financial Accounting Standards Board is effective for financial
statements with fiscal years beginning after December 15, 1997. The new
standard requires that public business enterprises report certain information
about operating segments in complete sets of financial statements of the
enterprises and in condensed financial statements of interim periods issued
to shareholders. It also requires that public business enterprises report
certain information about their products and services, the geographic areas
in which they operate and their major customers. The Company has not
determined the effect on its financial position or results of operations,
if any, from the adoption of this statement.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
IMPACT OF YEAR 2000
Many existing computer systems and applications, and other control devices,
use only two digits to identify a year in the date field, without considering
the impact of the upcoming change in the century. As a result, such systems
and applications could fail or create erroneous results unless corrected so
that they can process data related to the year 2000. The Company relies on
its systems, applications and devices in operating and monitoring all major
aspects of its business, including financial systems (such as general ledger,
accounts receivable, accounts payable and shareholder servicing), and
embedded computer chips, networks and telecommunications equipment and end
products. The Company also relies, directly and indirectly, on external
systems of business enterprises such as its advisor, lessees, suppliers,
creditors, financial organizations, and of governmental entities for accurate
exchange of data. The Company's current estimate is that the costs
associated with the year 2000 issue will not have a material adverse effect
on the results of operations or financial position of the Company. However,
despite the Company's efforts to address the year 2000 impact on its
internal systems, the Company may not have fully identified such impact or
whether it can resolve it without disruption of its business and without
incurring significant expense. In addition, even if the internal systems of
the Company are not materially affected by the year 2000 issue, the Company
could be affected through disruption in the operations of the enterprises
with which the Company interacts.
<PAGE>
WEST COAST REALTY INVESTORS, INC.
PART II
O T H E R I N F O R M A T I O N
ITEM 1. LEGAL PROCEEDINGS
The Company is a defendant in a lawsuit entitled JOHN LONBERG AND
RUTHIE GOLDKORN V. SANBORN THEATERS, INC.; WEST COAST REALTY INVESTORS, INC.;
AND SALTS, TROUTMAN AND KANESHIRO, INC. The lawsuit was filed in the U.S.
District Court for the Central District of California.
The Company was added as a defendant in plaintiffs' First Amended
Complaint filed May 7, 1998, apparently due to the Company's status as
landlord for a movie theater known as the Riverside Market Place Cinema.
The plaintiffs alleged violations of the Federal Americans with
Disabilities Act and the California Unruh Civil Rights Act with respect to
their movie-going experiences, including inadequate physical accommodations
for wheelchair-bound quests and incompetent theater personnel to wait on them.
Sanborn is the tenant and theater operator. Troutman is the architect who
designed the theater and its interiors.
The plaintiffs seek actual damages of $1,000 for each violation of
law; three times actual damages; and attorneys' fees, expenses and costs.
The plaintiffs also seek mandatory injunctive relief requiring the defendants
to make the theater accessible to and useable by disabled individuals.
The Company believes it has complied with all applicable provisions of
law and intends to vigorously defend the allegations contained in the lawsuit.
The Company believes that the lawsuit will have no material impact on the
Company's continuing operations or overall financial condition.
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBIT AND REPORTS ON FORM 8-K
(a) Information required under this section has been included in the
financial statements.
(b) Reports on Form 8-K
-None
<PAGE>
WEST COAST REALTY INVESTORS, INC.
S I G N A T U R E S
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
WEST COAST REALTY INVESTORS, INC.
(Registrant)
November 11, 1998 By: WEST COAST REALTY INVESTORS, INC.
A California Corporation
W. Thomas Maudlin, Jr.
President
November 11, 1998
John R. Lindsey
Vice President / Treasurer
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